How The Economic Machine Works by Ray Dalio

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Title	:	How The Economic Machine Works by Ray Dalio
Lasting	:	31.00
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Superb
Comment from : makrani heena

Is there a 2023 update? 😀
Comment from : Nadja Davidson

❤
Comment from : Arelis Alfonseca

I wish I seen this video before 2021
Comment from : Brandon Sanon-Jules

I watch this video every month
Comment from : RAJ SURIYAN G

❤
Comment from : Ethereum Dev Channel

Bullets Points to Remember I Hope you like it 😇 br br🔹 The economy operates like a simple machine with basic parts br🔹 It comprises transactions, driven by human nature, creating three main forces: productivity growth, short-term debt cycles, and long-term debt cycles br🔹 Transactions involve the exchange of money or credit for goods, services, or financial assets br🔹 Credit plays a crucial role in the economy, allowing increased spending, leading to cycles of economic growth br🔹 Productivity growth matters in the long run, while credit drives the short-term cycles br🔹 Debt is both an asset to lenders and a liability to borrowers, leading to debt cycles br🔹 The central bank controls the short-term debt cycle by adjusting interest rates br🔹 The long-term debt cycle is characterized by the accumulation of debt over time, leading to financial bubbles and eventual deleveraging br🔹 Deleveraging involves reducing debt burdens through various means, such as spending cuts, defaults, wealth redistribution, and central bank actions br📉 Debt Burden: br- Cutting spending leads to a decrease in the debt burden, but it causes incomes to fall br- Falling incomes outpace debt repayment, worsening the debt burden br- Reduced spending triggers deflation and forces businesses to cut costs, resulting in job losses and higher unemployment br- Many borrowers struggle to repay loans, causing a ripple effect as people withdraw funds from banks br br💼 Debt Reduction: br- Debt restructuring occurs when lenders agree to lower payments or extend repayment periods br- Debt reduction may lead to a decrease in income and asset values, compounding the debt burden br- Governments collect fewer taxes due to lower incomes and higher unemployment, necessitating increased spending and stimulus plans br- To fund deficits, governments raise taxes on the wealthy, redistributing wealth from the rich to the poor br br🌍 Global Implications: br- Economic contractions and depression can lead to social tensions and conflicts, both within and between countries br- Central banks print money to offset falling credit, which is inflationary and stimulative br- Central governments cooperate with central banks, increasing spending on goods and services br- Balancing deflationary and inflationary measures is crucial for a "Beautiful Deleveraging" br br💰 Money Printing and Inflation: br- Printing money can offset the disappearance of credit, but it should avoid causing high inflation br- Income growth should outpace the rate of interest on accumulated debt to reduce debt burdens br br🔄 Deleveraging Process: br- A "Beautiful Deleveraging" occurs when debt declines relative to income, economic growth is positive, and inflation is controlled br- Debt burdens fall gradually, and borrowers become more creditworthy, leading to increased lending and economic growth br- The deleveraging process can take a decade or longer, resulting in a "lost decade" br br📊 Economic Rules of Thumb: br- Debt should not rise faster than income to avoid crushing debt burdens br- Income growth should not outpace productivity to maintain competitiveness br- Raising productivity is essential for long-term success br br🌐 Economic Outlook: br- This template offers a simplified perspective on the interplay of short-term and long-term debt cycles and productivity growth br- Following these principles can be valuable for individuals and policymakers to manage economic challenges effectively
Comment from : Shivam Kumar

Problem 1brProductivity can't increase forever There is an upper limitbrProblem 2 (a political problem)brA political party that protects the interests of the rich and the corporations will sell out the people and break the systembrbrManipulating gas prices to control the short cycle is more effective than changing interest ratesbrIf there is inflation, raise gas prices It's like a hidden tax that doesn't decrease incomesbrbrGive the entire system to an AI and let a computer do the complex calculations and predictionsbrPeople are really bad at running economies Computers don't have self-interest problems
Comment from : OK OK OK OK OK OK OK

Clearly explained, great video Ray
Comment from : Salem Alderei

Great video
Comment from : Mike

Big Ray with the 🔥
Comment from : John Doe

copied
Comment from : ZOD

Ty
Comment from : FAIL FORWARD FAST

Wow! Thanks for the amazing work for free
Comment from : gangadhara priyanka

thx u sir!
Comment from : NU Wannu

All this seems legit ,but there is one force which transcedes cycles, and creates permanent wealth : Gold Has been for thousands of years
Comment from : Accesorii Mobile

I love it
Comment from : Mehmet Can Dağ

The money printing stage increases the Central bank's balance sheet, and the government's debt Can they grow unlimitedly without negative consequences?
Comment from : Nestor Diaz

Can't we just ban the concept of credit?
Comment from : SuperAlphaKirby

Almost everyone, including the media, is anticipating a market catastrophe, and as a result, many are turning a blind eye to the opportunities in the market I recently began investing in stocks and it was the best choice I've ever made If you genuinely want to be financially secure, disregard everything the media is suggesting The market offers a lot of chances Maximize your use of it
Comment from : Ahmed Hassan

Survival of the fittest eh? middle class to lower both ups and down mostly what they got is agony 👏
Comment from : fusi fase

Central banks aren't owned by governments They're in business with governments and when they fail the government covers their business partner
Comment from : eric bailey

This video is really insightful and explains everything you need to know about economy and how we've been impacted today by inflations and possible reccession As one who has experienced setbacks with these cycles I would say it isn't the best way to live, paying mortgage, multiple maxed out credit cards, these debts can be depressing But you can be a step ahead with compounded ROI, which can be stocks trading, ETFs, digital assets You're not free until you're able to make more than what you spend
Comment from : Matteo Antonio

Hey can anybody suggest me some books to understand economy thoroughly?brIt will mean a lot to me brThanks
Comment from : Kailash Chandra

If you want to see a clear example of all the problems explained here, go to check Argentinas history
Comment from : superrebotar

Damn, not even my economy book taught that well
Comment from : The Ministry of Peace

Beautifully stated Every politician needs to readd and understand this
Comment from : Frank ONeill

Key Takeaways brbr00:00 🌐 Overview of the Economic Machine br brThe economy operates like a simple machine, driven by transactions and human nature brThree main forces drive the economy: Productivity growth, Short-term debt cycle, Long-term debt cycle brTransactions are the building blocks of the economy, involving the exchange of money or credit for goods, services, or assets brThe government, comprising a Central Government and Central Bank, plays a significant role in the flow of credit brCredit is essential in driving spending, which, in turn, drives economic growth br05:07 🔄 The Role of Credit in Economic Cycles br brCredit allows individuals and businesses to increase their spending beyond their current income brBorrowers promise to repay borrowed amounts, creating both an asset for lenders and a liability for borrowers brIncreased income makes borrowers more creditworthy, leading to more borrowing and spending brCredit can be beneficial when it allocates resources efficiently and generates income for debt repayment brUnderstanding credit is crucial as it sets in motion predictable economic events br10:30 🔄 Short Term Debt Cycle br brThe Short Term Debt Cycle is driven by fluctuations in credit availability brEconomic expansion occurs when credit is readily available, leading to increased spending and rising prices (inflation) brCentral banks use interest rate adjustments to control inflation and stimulate or slow borrowing brA recession happens when spending contracts due to higher interest rates, leading to lower incomes and deflation brThe central bank primarily controls the Short Term Debt Cycle br14:51 🔄 Long Term Debt Cycle br brThe Long Term Debt Cycle is characterized by the gradual accumulation of debt over decades brRising incomes and asset values offset the growing debt burden initially brDebt burdens eventually become unsustainable, leading to decreased spending, falling incomes, and a deleveraging process brDeleveraging involves cutting spending, reducing debt through defaults and restructurings, wealth redistribution, and central bank intervention brDeleveraging can result in social tensions and political changes br19:37 🔄 Deleveraging and Its Four Ways br brDeleveraging occurs when debt burdens become unmanageable, leading to reduced spending and economic contraction brFour ways to address deleveraging: cutting spending, debt reduction through defaults and restructurings, wealth redistribution, and central bank money printing brCutting spending and debt reduction are painful and deflationary processes brWealth redistribution occurs through higher taxes on the wealthy brCentral banks print money to stimulate the economy by buying financial assets br24:18 💰 Printing Money and Its Impacts br brCentral banks resort to printing money when other measures fail to address economic challenges brPrinting money is inflationary and stimulates the economy, benefiting asset owners brCentral governments can't print money but can inject funds into the economy by buying goods and services br25:44 🏦 Cooperation between the Central Bank and Government br brThe Central Bank and the Government need to cooperate during economic crises brThe Central Bank can buy government bonds to provide the government with funds for stimulus programs brThis cooperation increases people's income and government debt but lowers the overall debt burden br26:14 🌟 The Concept of a Beautiful Deleveraging br brA Beautiful Deleveraging is a balanced approach to reducing debt burdens during a crisis brIt involves decreasing debts relative to income, maintaining positive economic growth, and avoiding inflation brAchieving a Beautiful Deleveraging requires the right mix of cutting spending, reducing debt, wealth redistribution, and printing money br27:38 💰 The Role of Printing Money br brPrinting money can help offset the disappearance of credit during a deleveraging brThe Central Bank must ensure that income growth exceeds the rate of interest on accumulated debt brCare must be taken not to print too much money, as it can lead to high inflation br29:02 🔄 Reflation and the End of Deleveraging br brAs incomes rise and borrowers appear more creditworthy, lending and spending increase brDebt burdens begin to fall, leading to economic growth brThe deleveraging process, if handled well, can eventually fix the economic problem br30:24 📈 Three Key Rules of Thumb br brDebt should not rise faster than income to avoid crushing debt burdens brIncome should not rise faster than productivity to maintain competitiveness brIncreasing productivity is crucial in the long run for economic success
Comment from : test bench

!
Comment from : investitore scettico

Cash used to be credit that would be paid back with Gold, however now that the dollar has been taken off the Gold standard, the dollar is now just paper not backed by anything
Comment from : Ruvim Tereshchenko

Ray, how come you aren’t running things… why are we always being ran by people that are either completely clueless, or purposely malicious, idiots like yellen and others…br 🤔 🧐 🤨 brAmerica was not meant to be centrally planned like we are right now, the idiots only make everything worse And it’s usually for their own gains, it’s too bad more Americans dont have a clue how $$$$ works, it’s sad how clueless Americans are with our own politics (tis the only reason the far left and this current push for idiotic socialism exists)
Comment from : Michael House

chef tu t'es trompé
Comment from : Shady Abd El-hakam

This video has taught me more than any school ever did
Comment from : Copicious

We need to show the governement this video 😅
Comment from : Big Bizz 🐢

Thank you Mr Dalio!
Comment from : Clinton Siegel

My country's government money people should watch this 100 times
Comment from : francis nganga

life changer!
Comment from : Samir EL ZEIN

Conclusion: who dies with debts makes profit
Comment from : April

I'm glad its happy ending
Comment from : woo shorts

Best video of all time
Comment from : mustafa ahmed

First infographics
Comment from : tunde adepoju

I love economics watching this made me emotional and crying!!!! Wish i had him as my economics professor 😢❤❤❤
Comment from : Cynthia

Simple yet complex refreshingly scary
Comment from : simbad909

Economic investigator Frank G Melbourne Australia is still watching this very informative content cheers Frank
Comment from : DetectiveofMoneyPolitcs

We desperately need more teachers like this in our education system"I must commend the outstanding graphics in this video! The visuals are incredibly well-crafted, adding a visually captivating dimension to the content Great job!"
Comment from : Bhoomika Shetty

Given the current economic difficulties that the country is experiencing in 2023, how can we enhance our earnings during this period of adjustment? I cannot let my $680k savings vanish after putting in so much effort to accumulate them
Comment from : Chris Bluebird

what a video👏👏🙌
Comment from : Thandiwe Ntswane

NO THANK YOU!
Comment from : Somesh

wowbrvery well explained
Comment from : Sashmita Jena

This guy know his stuff, and his team is wonderful at breaking down this concept
Comment from : Ben Wearne

And the elites use the cycle to gobble up every asset without contributing to society
Comment from : rick hall

This really should be REQUIRED viewing by every single American citizen - starting at 8 grade level If every American understood these principles, maybe we would make better decisions about how we make money, spend money, AND, WHO we elect to represent us in making very important economic decisions on our behalf Thank you Mr Dalio
Comment from : The Purple Enigma

The US economy applies a simple structure where it is very much a cycle Where the credit system and transactions However, in today's economy we're experiencing the standard of living increasing where our wages are not sufficient the costs This can be seen through the housing market where many young millennials tend to rent instead of paying mortgage towards their home
Comment from : Shivan Desai

bI feel like I just watched the most helpful video on YouTube🎩Congrats/b
Comment from : Politically Incorrect

Although credit allows borrowing above and beyond present means, an economic system sets the foundation for resource distribution Deleveraging refers to reducing debt levels, whereas deflation refers to falling general prices As this balance is essential for long-term economic stability and prosperity, it is crucial to ensure debt growth does not outpace production
Comment from : Heavenly Angel

The fact that this video was uploaded 9 years ago😱
Comment from : Dhiren Shah

How to make videos like these?
Comment from : dhanraj

If we are to survive in this economy, we need assistance right away The ETF and stock markets are still quite volatile, just like the property market My $370,000 portfolio is crumbling, what’s the best way to take advantage of the market?
Comment from : Norman Ghali

How can economy take debt from future, can someone explain?
Comment from : Aman Gupta

there is something called army; there are thousands things which are taken-given thousand times between personels; can you believe no take or give a penny for any of those thing; however, each of them receive their salary/dollars Can you imagine the extension of the transaction of things beyond the army personels ?bryes I can imagine but I do not want to die; so pardon me
Comment from : Noor Ahmad

Thank you so much, now I can see the big picture of economy
Comment from : Minh Nguyen

amazing graphics and narration
Comment from : Princess Gonzales

I like how it got even worse during Covid That’s why I said there’s gonna be another depression last year 16:49
Comment from : Tate Drebes

I can't believe it's posted 9 years ago It's a video I think everyone on this planet should watch It's to nice to see how a video can educate people so well Thanks to Ray Dalio, the animator and youtube for providing a platform like this
Comment from : Arkajit Banerjee

Great explanation Where are we in the cycle and what is the best way to profit from it?
Comment from : Jeff Hawkins

Thank you so much for this helpful video 🎉
Comment from : Gin

Simply great work siri have no words to sayi am amazed to see a difficult subject can be learned so logically in an half hourthank you sir 🙏🙂
Comment from : Mayur Seth

Someone please explain me the long run, short run thing It's just not settling in my mind
Comment from : Bandita💜

I'm a fairly simple person Credit is not something to strive to, especially in today's markets Wouldn't it better if fedgov protected our constitutional rights instead of trying to indirectly run businesses? If we paid small, limited taxes, we would have more $ to spend and Wouldn't depend on Credit which gets a lot of ppl in trouble
Comment from : Brian Nesbitt

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Comment from : Rose Smith

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Comment from : john dickson

I'm also one of her clients My first experience with her gave me the assurance that has made me to invest without fear of losing
Comment from : Brandon James

Nice video! Despite the dip in crypto, I still thank you for the level-headed financial advice I started forex and crypto investment with $4,345 and since following you for few weeks now, I've gotten $18,539 in my portfolio Thanks so much Mrs Peculiar Anderson
Comment from : Paul Carl

I noticed the word CON good simple explanation Thank you
Comment from : no

what do we learn? debt is needed for an economy to grow but just make sure you are not the one in debt when it comes crashing down :Dbralso, invest in something that has real value to it And also, in german we say: Verhalte dich antizyklisch
Comment from : Qadi90

14:18 GREAT
Comment from : Quran_sura_ayt

interest was only an invention by vault owners holding customers gold What now, it’s 2023 not 1723 Beyond 2043 ? Lifetime interest free loans and credit fiat medium of exchange no longer required ❤
Comment from : Quinton Scholz

You work for 40yrs to have $1M in yourbrretirement, meanwhile some people are putting just $10K in a meme coin from just few months ago and now they are multimillionaires
Comment from : Cristian Montano

This is why we should all stop learning economics, and start learning Political Economy
Comment from : E Ml

Thank you very much!
Comment from : Bekzod Shamshiev

Hi Ray 👋brGreat work 🔥brCan you make your content for Ukrainian people?
Comment from : Orest Maluga

Because it’s human nature ……🙄🙄
Comment from : Mikael Nyberg

Thank you for share knowledge🎉
Comment from : Arun Kumar

truly gem, without your book, principle: life and work, i wouldn't know about this gem on understanding on interest rates etc about economics It truly help me understand of macroeconomics Hopefully will help me increase my resilience on my emotion fluctuation when trading hahaha
Comment from : Arianbia

This video is so good i come back to it every couple of years
Comment from : BitSmiths

Very complexfew examples but all in reportbrSpeed of circulation of money from pocket to another is creating additional monetarymass so inflation( milton friedman) i don't know if he covered the whole subject or not but talked about the speedbrThe Profit which Non tangible notion and created once operation of sales is doneAdditional monetarymass so inflation if Not in Savings etc
Comment from : David

Excelente vídeo Explicou de forma simples conceitos que são tão difíceis de se abstrair da forma correta
Comment from : Danyel

Great video!
Comment from : Connor OReilly

Ironically, back in 2020 United States printed more money and turned deleveraging into horrific incident which slowed down the entire world
Comment from : Walter White

I took the time to listen to your whole ad and I learned from it considering everything that has happened from 2008 until now in light of it is deep thank you
Comment from : Deeann Mathews